Israel won an important symbolic victory against its international critics today, as it officially joined the Organization for Economic Cooperation and Development (OECD).

Membership in the elite, staunchly capitalist 31-member club has long been sought by Israel as a stamp of approval on its efforts to transform itself from a nation of socialist farmers to a high-tech powerhouse that dramatically outperforms its Middle Eastern neighbors.

“The membership opens up to us access to sources of investment available only to developed economies,” said Israeli Prime Minister Benjamin Netanyahu in Paris today, where the OECD welcomed Israel, Estonia, and Slovenia to its ranks. “There are global funds with enormous amounts of money that have specific amounts of money they must invest in developed economies, a category we are now included in.”

But while Mr. Netanyahu has focused on economic benefits, others have touted Israel’s accession to the OECD as a political coup after being buffeted by calls for sanctions and economic boycotts against Israel, particularly since its three-week offensive against Hamas in the Gaza Strip last year.

“This is definitely being portrayed in Israel as a victory of legitimacy [and] acceptance in the international community,” says Shir Hever, an Israeli economist and head of the left-leaning Alternative Information Center. “Israel wants to – and will – be called a developed democracy.”
Israel: No. 1 in investing GDP into R&D

The gross domestic product (GDP) of this Mediterranean country of 7 million is more than $200 billion, just behind Hong Kong – which has a similar population. Its annual per capita income is nearly $30,000, nearly six times that of neighboring Egypt and on par with the US state of Idaho and .

Israel also invests more of its GDP into scientific research and development than any other country in the world, according to the World Bank.

“Israel, with a population of greater Philadelphia, has about as many start-ups as the United States,” says Daniel Doron, director of the Israel Center for Social and Economic Progress in Jerusalem. ” We are a great asset to the OECD, we belong there.”
Palestinians: OECD has legitimized the occupation

But Palestinian leaders and civil society actors are slamming the decision, saying that the OECD has effectively legitimized Israel’s occupation of the West Bank. They also say the OECD’s credibility has been hurt, since it fudged membership criteria and accepted a state that practices what some see as economic apartheid.

A memo written by the OECD’s statistics committee in February and obtained by Jonathan Cook at CounterPunch Magazine pointed out that Israel was reporting economic output for the West Bank on the basis of nationality, rather than location, which is at odds with OECD standards.

In practice, Mr. Hever says, the government cherry picks the well-to-do Israelis on the West Bank for national economic statistics, but ignores the economic conditions of the poorer Palestinians in the same areas, effectively boosting Israel’s economic numbers.

“If you include … the Palestinians living under Israeli occupation, or those working in the settlements, Israel would be one of the most unequal countries in the world, and therefore ineligible under OECD criteria,” says Hever.

Many Israelis don’t see what the fuss is about when it comes to the country’s economic reporting. In their view, Israelis’ economic achievements should not be overshadowed by the now 43-year-old occupation, and welcomed the OECD approval as a salve for the damage done to Israel’s reputation by its military campaign in Gaza 16 months ago.

“The [West Bank] settlements in this case are an issue that doesn’t deserve the attention it gets. It distracts people from other, more major, problems,” says Mr. Doron.

Settlers more wealthy than the average Israeli

The 500,000 Israelis living in the occupied West Bank and East Jerusalem enjoy an average annual income almost 10 percent higher than the Israeli norm, according to a study carried out by the Ariel University Center of Samaria in the West Bank. Unemployment rates for Jews in the occupied territories are also lower, and the settlements are partially subsidized by the government.

Restrictions on the free movement of Palestinian goods and people, say critics, is also at odds with OECD principles, which call for open and transparent borders. There are approximately 70 permanent Israeli military checkpoints in the West Bank, where civilians, businessmen and their goods are often held up for hours while vehicles are searched.

Israel says the network of checkpoints is needed for security, after a series of suicide bombings carried out by Palestinian militants during the second intifada early last decade. On Sunday, however, the Israeli army announced plans to lift 60 roadblocks.